Saturday, November 16, 2013

Welcome to the Future

This past week New York City auctioned 200 new taxi
medallions for record prices. The high bid was about $2.5 million for a
“minifleet” package, and the accessible medallions fetched record prices as
well. These prices and the people who paid them send strong signals about what
will happen with the taxi industry in New York. The rent seeking behaviors will
continue, the regulators are captured by the industry they are supposed to
regulate and taxi policy in the city is expected to remain at the status quo of
constrained supply and unmet demand. I suspect that the boro taxi program will
barely survive but not be expanded, and Uber and other ridesharing services are
screwed. In short, what we have now for taxi services is pretty much all we
get. I worry that most or all of our transport systems have similar constraints. Welcome to the future.

So are we conscripted to a future just like the present? Can
we solve pressing concerns?

Recently David Levinson write a nice post about what traffic
might be like in 2030. It is a nice future scenario that is dramatically improved
on current inefficient systems. I agree with much of it but am concerned that
regulatory and labor constraints have cemented too many of our systems in place
and the future will end up looking a lot like what we have now. Here are some
areas of particular concern and in no particular order:

·Concession agreements are in place that are far longer than
existing technologies will last. For instance, the Chicago parking meter
concession requires that the city compensate the LLC for any loss of value to street parking during the course of the 75-year agreement. This means that even if cars and
driving decline, Chicago may have to pay a penalty. This affects Chicago’s incentives for reform.

·Labor contracts require too many people working
jobs that should be automated, such as train drivers. This limits new options and services. There
will also be a persistent bias toward historical rush hour service even though
rides demanded will spread out across nights and weekends. We will also likely replace all passenger cars with driverless cars before we get any driverless transit vehicles.

·Taxi services are not regulated for the benefit
of passengers, nor are the taxi industries all that interested in expanding
services. They prefer to protect their rent seeking. Taxi interests will block
new entrants and ridesharing. This is especially problematic because of the
nights and weekends issues raised above.

·Cities are
branding themselves and this will reduce their economic competitiveness in the long run. Brooklyn, Portland, Austin and others all cultivate their
identities at great expense and effort. This suggests that they will fiercely
protect what they see as core features, including the built environment and transport technologies.
Building restrictions and business preservation will become more restrictive
over time, reducing the dynamics of city change.

·Municipal budgets are strained from obligations
that do little to improve the lives of current and future residents. Pension
obligations are of particular concern as it is extremely difficult to raise
taxes to pay for salaries to retired people. These obligations do not have an
easy policy answer but will limit future investment resources and flexibility to address currently unknown concerns.

·Much of the infrastructure expansion that has
occurred over the past few decades (roads, transit, stadia, etc.) makes
municipal budgets worse off in the long run. How cities and states decide to
dismantle infrastructure is a crucial issue over the next few decades. As the public rarely has the option of exit deliberate decline will be slower than needed.

·Public investment in infrastructure is not
currently aimed at or promoting the greater good. Business elites, downtown
interests and others are capturing public spending on transit to serve private
interests at the expense of riders. See the streetcar trend as an example. Cities, regions and the nation are not
bound together by clear goals, so policy is directed to do something, anything,
without a good sense as to what is supposed to be achieved. Again to the streetcars, if they are good for economic development then the budget spent on them should be judged against all other economic development uses of that money. Yet we never discuss opportunity costs like this. Infrastructure
investment is pursued as an end unto itself. We tend to focus too much on
physical changes (which are small in aggregate) at the expense of service
changes that may have larger effects on travel and economic activity.

We are also in a prolonged period of sclerotic governance.
While all levels of government have strong roles for ensuring access to
opportunities, public safety and economic health, the process of governance is
currently not up to the tasks. I see stronger forces protecting the status quo
than pushing for reform (see the taxi industry as an example).

So traffic may decline but we may not be able to adjust our
systems adequately to address the changes that occur. If our systems of
governance work to maintain what we have then the future will look very much like
the present.So how might we re-orient
our governance systems to meet future needs? I will return to this in a later
post.

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About Me

David King is an Assistant Professor of Urban Planning.His research explores the impact of local
transportation planning on the built environment, public finance, social equity
and accessibility.As part of this
research he has written about the phenomenon of cruising for parking and used
spatial regression techniques to analyze travel behavior.He also studies how public policy influences
the adoption of new technologies to address congestion, energy and
environmental concerns.These issues are
the focus of Professor King’s teaching through his courses covering planning
techniques and methods, transportation and land use planning and transport
policy.